SMALL BUSINESS MANAGEMENT

1. SMALL BUSINESS MANAGEMENT Chapter Four The Business Plan

2. Getting StartedEstablishing the Business • Advantages of Organizing a Business from Scratch • Disadvantages of Organizing a Business from Scratch

3. Components of the Business Plan • There are ten components in a plan. • 1. Prepare a Table of Contents • 2. Executive Summary and background • 3. Describe the Management Team • 4. Describe the Business Objective • 5. Plan the Marketing Approach

4. Components of the Business Plan • 6. Describe the Selection of the Location • 7. Determine the Physical Facilities • 8. Plan the Financing • 9. Plan the Personnel • 10. Investigate the Legal Requirements

5. Components of the Plan • 1. Prepare a Table of Contents • overview of the plan • quick access to the various parts of the plan

6. Components of the Plan • 2. Executive Summary and Background Statement • Completed at the end of the complete plan • history of the project to date • statement of the intended mission of the venture

7. Components of the Plan • 3. Describe the Management Team • resume and background of those making the decisions for the organization

8. Components of the Plan • 4. Establish the Business Objective • Business Size • Production Levels • Performance Levels

9. Components of the Plan • 5. Plan the Marketing Approach • Have a clear concept of the target market. • Understand the target market’s needs, wants and purchasing habits • answer the following questions • where, when, what, how much, why • Be aware of any uncontrollable factors that might affect the marketing of the product or service

10. Components of the Plan • Be aware of any uncontrollable factors that might affect the marketing of the product or service such as • existing or pending legislation relevant to the business • state of the economy in the market • extent and strategies of the competition • cultural norms of the market • new technologies that might offset the business

11. Components of the Plan • Plan the Marketing Program • the Product or Service • the Distribution System • the Promotion Plan • the Pricing Plan

12. Components of the Plan • 6. Describe the Selection of the Location • the Trading Area • the Economic Base • Attitude of the Trading Area towards New Businesses • Competition • Costs

13. Components of the Plan • The Site • accessibility, site costs, restrictions, site history, proximity to other businesses, physical characteristics • the Buy-or-Lease Decision • cost of the lease, length of the lease, restrictions, repairs and lease hold improvements, insurance coverage • Running the Business from One’s Home

14. Components of the Plan • 7. Determine the Physical Facilities • insurance types • loss or damage to the property • business interruption • liability and disability • life insurance • insurance decisions • what kind to purchase, how much to purchase, from whom to purchase the insurance

15. Components of the Plan • 8. Plan the Financing • establish capital requirements • make feasibility projections • determine the sources of funding • plan the accounting, bookkeeping and computer systems • determine the financial evaluation measures

16. Components of the Plan • 9. Plan the Personnel • Administrative structure • Employee recruitment and training • Personnel Policies

17. Components of the Plan • 10. Investigate the Legal Requirements • Legal Structure (four styles) • 1.Sole Proprietorship • advantages and disadvantages • 2. Partnership • Limited, General • advantages and disadvantages • 3. Cooperative • one member-one vote vs each share a vote

18. Components of the Plan • 4. Corporation • advantages and disadvantages of a corporation • steps in incorporation • selection of the business name • development of the share structure, directors, restrictions on share transfers, etc. • description of the company operations • acquiring the necessary supports

19. Components of the Plan • Joint Ventures • Licenses and Taxes • Federal Government • income tax, goods and services taxes, excise tax • Provincial Government • income tax, licenses, sales tax • Municipal Governments • licenses, property taxes, business taxes • Patents • registration, search, application

20. Appendices • Appendix A - Checklist for a Small Business Plan • Appendix B - Sample Business Plans (2) • The Sock Hop, Quality Cuts • Appendix C - Incorporation of Companies and Associations • Appendix D - Jurisdiction of Licenses and Taxes

21. CONCEPT CHECKS • 1. What are the advantages and disadvantages of owning a small business? • 2. What steps are involved in preparing a business plan? • 3. What criteria must be evaluated before choosing a trading area? • 4. When is it advantageous to lease instead of owning?

22. CONCEPT CHECKS • 5. What information should be investigated before construction starts and purchasing equipment? • 6. Why is insurance purchased? What are some small business insurance types? • 7. What major financial aspects should be planned in advance of business operation? • 8. What are four legal structures that an owner can utilize?

23. CONCEPT CHECKS • 9. What are the advantages and disadvantages of Incorporation? • 10. What level of government issues business licenses? • 11. What taxes are levied by the Federal Government? • 12. What are the steps required to register a patent?